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Nokia kicks OEMs to the kerb

$5bn worth of handsets won't happen in 2009

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Nokia is getting out of third-party manufacturing, a move that will see the Finnish giant spending $5bn less on making handsets, according to specialists iSuppli.

Seventeen per cent of Nokia's manufacturing was outsourced to Original Equipment Manufacturers (OEMs) in 2008, according to Reuters, and that’s the business from which Nokia last week announced they would be pulling back, in the face of increasing economic pressure.

That decision is, according to iSuppli, enough to make it reassess 2009 predictions for the sector; currently standing at a contraction of 9.9 per cent compared to 2008, when the industry turned over $300.7bn.

For Nokia, however, this means the company is effectively responding to economic realities and is a show of flexibility rather than something to be concerned about - at least until the cuts extend into its own production.

Nokia said today it will be supplying $1.76bn worth of handsets to reseller China PTAC, putting Nokia handsets onto the shelves in the biggest mobile phone market in the world, even if they are all made in-house. ®